Any Brits Care to Comment?

[Guest ncm2169]

British economy on track for worst since 1931

 

(Posted on AmericaBlog)

 

This is not going to be a quick recovery for many countries and especially the UK. There may be some substance to the suggestions that the UK (and the US) are ahead of others in terms of shedding toxic assets and cleaning up the banks but there is still so much pain to come. The losses are horrendous and years of fake numbers are not going to be overcome in a year or two. The UK economy relied too much on banking/finance and the previous big growth years are going to be challenging to replace.

 

The Office for National Statistics reported yesterday that manufacturing output fell by 6.4 per cent in the three months to January – an even faster rate of decline than the 4.9 per cent contraction seen in the quarter to December. The motor industry was one of the hardest-hit sectors – output falling by 10.6 per cent during the quarter. Overall, the annual rate of decline in output has reached an alarming 12 per cent.

 

Analysts were shocked by the figures, as they point to a GDP decline in the early part of this year that may prove even steeper than that seen during the last few months of 2008, when GDP shrank by 1.5 per cent. The research firm Capital Economics said that the trends could point to GDP contracting over 2009 by "4 per cent or so".

 

Such a result would rank as the country's worst year for economic growth since 1931 – which saw a fall in excess of 5 per cent, the collapse of a Labour government and ushered in a miserable decade of mass unemployment and hunger. A 4 per cent slide would easily beat the post-war record of a 2.1 per cent slump, set in 1980.

 

David Kern, the chief economist at the British Chambers of Commerce (BCC), said of manufacturing: "The sector has so far failed to benefit from the sharp falls in sterling. The critical priority is to ensure that the vital skills base is not lost during this recession. Urgent measures are needed to help viable and well-managed firms hold on to their trained and skilled employees."